Consumers lose out as TGA reform turns into a hot potato

Reform of medical regulations has become a hot potato being passed from one agency to another. eltpics/Flickr

Two bills in the national parliament provide a snapshot of our health regulatory system, and just like a smoker’s lungs, it’s not a pretty picture. The bills show that we’re slow in fixing regulatory incapacity and an unwillingness to make tough decisions that would benefit everyone.

Let’s look first at regulatory incapacity, specifically the Therapeutic Goods Administration (TGA) – the national pharmaceuticals and medical devices regulator. It’s an agency that’s too important to abolish; we can’t start again from scratch.

Unfortunately, it’s not performing very well – resulting in both serious harm to thousands of Australians and a burden to the taxpayer many times greater than its budget. When the TGA fails, you pay the price through increased public health costs and lower national productivity. And it’s immune from legal action over that failure.

Recent examples of its incapacity are failures regarding breast implants and hip implants. The government has responded with a bill that, in part, is an admission of defeat.

Better consumer protection?

The proposed legislation allows the health minister to exclude products from coverage by the TGA, apparently in the expectation that problems will be addressed by the Australian Competition and Consumer Commission (ACCC) under consumer protection law.

The ACCC, for example, has dealt with misleading promotion of energy bracelets, diet supplements and patches, “miracle devices”, “cancer cures” and other products that don’t perform as described.

So, rather than a long-overdue revitalisation of an inward-looking and much criticised agency, responsibility has been pushed sideways to a rival that lacks life sciences expertise and is already stretched.

A more positive aspect of the bill is the scope for removing products from the Australian Register of Therapeutic Goods of medical devices and complementary medicines that, because of inadequate screening, shouldn’t have been listed on it in the first place. Inclusion on the register is a requirement for lawful supply of those products.

The TGA has historically been reluctant to deal with advertising. That’s of concern because the proposed legislation empowers it to suspend or cancel medicines from the register where its “presentation” (such as packaging and labelling) ceases to be of an “acceptable standard”. There’s no point having that authority if it is not used.

Perceptive observers have argued that we need to do more. There is, for example, a pressing need, from both a consumer law and medical goods perspective, for a response to egregious “label tweaking”. That tweaking - in the news recently - involves enterprises sidestepping regulation by simply adopting a new name for products that were the subject of TGA or ACCC action.

Likewise, there’s a need for a mandatory disclaimer on homeopathic products (marketed and consumed on the basis that they have therapeutic properties). That disclaimer would indicate the products haven’t been assessed for or by the TGA for therapeutic effectiveness. Listing by the TGA doesn’t validate claims about efficacy, which are by definition unprovable – the “extreme dilution” that’s the foundation of homeopathy means no pharmacologically active compounds are detectable in its formulations.

Alongside that mandatory “truth in advertising” requirement, there’s a pressing need for imposition by the TGA of meaningful penalties for breaches of Therapeutic Goods Advertising Code. At the moment, if you misbehave in promoting concoctions you can laugh all the way to the bank because that abuse of consumer trust is apparently not the TGA’s problem.

Regulatory incapacity means a license to exploit the gullible and unwary.

Forcing transparency

The second bill in parliament regards “transparency” and is an initiative by a Greens senator. It’s based on a belief that drug companies and doctors won’t genuinely embrace disclosure, so regulation is required.

Some practitioners, drug companies and advocacy bodies dislike the idea of transparency. They’ve resisted calls for disclosure of aggregate payments by pharmaceutical companies and payments to individual practitioners.

The health department has left that hot potato to the ACCC, which has encouraged members of Medicines Australia (pharmaceutical industry body) to move toward full disclosure within a few years. Businesses in the generic medicines sector, which includes some multibillion dollar global enterprises, are even less engaged.

The bill seeks to establish new offences regarding inappropriate “provision of money, services, or other possible inducements” to medical practitioners by pharmaceutical companies. It says payment at a credible rate for genuine services is fine. But “payola” in the form of holidays at exotic resorts under the guise of education is not. It assumes that mandatory reporting of money flows could be easily built into medical practice management systems.

The bill is unlikely to become law. So caterers will not have to gnash their teeth at the prospect of a $100 per head cap on catering at “information” events.

We do need to fix the TGA and the regulation of health products (drugs, devices and “supplements”). The cost of regulatory incapacity - lack of coherent legislation, capture by stakeholders, lack of expertise, unwillingness to take action - significantly outweighs both the TGA’s and the ACCC’s budgets.

The two bills are a welcome move to consistency and transparency. Let’s hope that there will be bipartisan support for the transparency bill. It’s sufficiently important to be above party discipline.